Re: Pre-owned BMW 320d, pre-owned Skoda Octavia 2.0 TDI, or brand new Octavia 1.8 TSI DSG? Hi,
A quick analysis on the cost of ownership of the car over a period of 6 years:
I have always maintained that the maximum cost in car ownership is the depreciation of the capital value.
I purchased the car in November 2017 for 22.5 lacs by using my savings (No Car Loan). If the 22.5 Lacs would have been kept in a bank FD (Risk Free Returns) earning 5.5% per annum the 22.5 lacs would become ~31,00,000 in November 2023 over a period of 6 years. (Power of Compounding)
The market value of the car in November 2023 should be around 7 – 7.5 lacs. This means that it will cost me ~ 23,00,000 in depreciation and loss of interest income alone.
In addition there are the other expenses of Insurance, Servicing, Repairs, Tyres, Battery, etc..
The maths works out to a total expense of ~ 31 Lacs over 6 years or approximately ~5.2 lacs per year. This is in line with what I had anticipated when I made the purchase decision in 2017.
Purchase Price (Nov 2017): 22,50,000
Purchase Price with Compounded Interest @ 5.5% P.A. in Nov 2023: 31,02,396
Market Value of Car in Nov 2023: 7,50,000
Expenses:
Depreciation: 23,52,396
Insurance: 5,81,000
Servicing: 48,000
Repairs: 19,000
Tyres: 44,000
Battery (Varta - Imported from Germany): 29,000
Car Washing, Detailing, Misc.: 45,000
Total Expenses for 6 years: 31,18,396
Annual Cost (Divided by 6): 5,19,733
I am not including cost of fuel. If I wouldn’t take the BMW to travel to a place I would then drive another car or take a cab which would cost me almost the same or a little bit more. The total kms driven over 6 years will be around 20,000 Kms. |